Category Archives for "Finances & Careers"

Should Married Couples Have Joint or Separate Bank Accounts?

By Dustin | Finances & Careers

Do you and your spouse use a single, joint checking account?

Or do you choose to keep separate bank accounts?

Have you considered the alternatives?

I was frankly surprised at the responses I’ve heard to these questions over the past week or so.

And I was really shocked at the emotional reaction that many have in defending the structure of their family finances.

It started in the responses I received where everyone seemingly ignored my main points in the “7 Simple Steps to Financial Success in Your Marriage” and focused in on my statement that a joint checking account was the way to go.

Curious, I then posed the question on the Engaged Marriage Facebook page and received some incredible responses.

For instance, the pro joint account crowd provided comments like this:

Mary: We have a joint checking account. Always have and always will. We’re married and share everything – nothing is his and nothing is mine. We agree on finances and how we spend OUR money.

Erica: We have joint everything…we discuss all major purchases/goals/bills, but gas, food, etc. just comes out of our joint account as needed. It works very well for us and I couldn’t imagine having it separate. All the figuring out who has paid for which thing and how much and trying to make it “even” etc. has never made sense to me. It’s US, and OURS. 🙂

And some readers love their separate checking accounts:

Sam: We have separate accounts. I cover most of the bills and the majority of his money is used for discretionary costs (gas, food, etc). We both have access to each others accounts, so it’s not like my money is strictly my money (and vice-versa). Works for us!  Honestly, I think a joint account would cause some stress for us.

Jennifer: We have separate accounts. I pay mortgage and living costs (groceries, fun, etc.) and he pays all other bills and savings. We find it much easier to manage money that way.

Don’t Tread on My Financial Life

I don’t think my suggestion of trying a single joint checking account was too radical or really all that forceful in the way it was presented.

Nevertheless, pretty much every comment on my Couple’s Financial Success post was related to that issue.  I was even accused of making broad generalizations, and it was clear that I offended some folks with my recommendation.

It turns out that people can be pretty passionate about their choice of bank accounts!  I loved the conversations, and as I have taken some time to think about the issue a little more, I’ve even opened my mind a bit.

I thought it would be useful to outline the main reasons why a married couple may choose a single joint account vs. separate accounts.

And then, for the really important part of this exercise, we’ll take a look at why this decision should matter to you and your spouse.  Here’s a video I created that really cuts to the chase on this issue:

Reasons Why a Joint Bank Account is Best

• Encourages regular communication about finances
• Built-in accountability partner on spending matters
• Fosters unity in money matters
• Strong sense of working together to meet financial goals
• Clear that all household income is treated as “our” money
• No conflict or administrative work in “splitting up the bills”
• Dave Ramsey says this is best, and we all love Dave, right?

Reasons Why Separate or “Yours, Mine and Ours” Bank Accounts Rule

• Duties of financial bookkeeping not solely on one person
• Clear boundaries set up-front for individual spending
• May be easier to track specific savings goals
• Easy to surprise your spouse with gifts
• No need to talk about finances regularly
• Each spouse can keep “their proportionate amount” of household income
• Ability to maintain privacy about what you spend money on
• More independence and autonomy to spend as desired without seeking concurrence

So, who is really right?

After reading a lot about this issue and reflecting upon it, I have divined the one, true and infallible answer to this age-old question:

It depends.

You will notice that the reasons I listed in support of separate accounts are broken into two groups.  In my opinion, the “black” group are legitimate and healthy reasons for having multiple accounts.  However, the “red” group spells trouble.

The reasons listed in red are centered in a mentality of not just separate accounts, but separate finances within the marriage.

I feel strongly that this is a dangerous and unhealthy foundation for money management for a married couple.  These reasons come from a spirit of selfishness, and they do not reflect the fact that marriage is a partnership.  And they certainly do not support open communication and trust.

The Key is Intent

Personally, Bethany and I use a single, joint checking account and feel that is absolutely perfect for us.  And before I gave this much thought, I would have prescribed this same arrangement for every married couple.

Actually, I still think this is the way to go, but I can see where other approaches can work fine, too.

The main reason that we choose to keep a joint bank account is our belief in unity.  We believe that when you get married, you become one, and money is a key area where this is lived out.

There is no “yours, mine and ours” but only “ours.”

When you handle your money together, you are agreeing on your hopes, dreams and goals together.

The use of a single joint account also encourages (requires, really) open communication about your finances, which is absolutely critical to a successful marriage.

As long as the right intent is there, I think you also operate in full unity with multiple accounts.

I don’t think it provides as accommodating of environment for unity and open communication, but I fully believe many couples lead happy, healthy and successful financial lives together under this arrangement.

Plus, we feel it is just easier to manage when everything goes into one account and out of the same account.  For us, it’s the simpler solution to maintain a single checking account.

I realize that some couples find the simplicity of their money management to actually be enhanced by using multiple accounts.  And, while that’s not our deal, I can certainly understand and respect that.

In fact, we have several different savings accounts for this same reason.

The Bottom Line

In my opinion, the real question to ask here is not how many accounts you have, the types of savings accounts, or what you call them.  The key is to operate your finances in a unified way with open communication at all times.

You can do that with one account or twenty. However, if you do operate with multiple accounts, they should all be “joint” accounts that you both can access, and there should be absolutely no secrets about how money is being earned or spent.

And remember that your motivation should be one of unity.  That will keep you in the black and out of the red in more ways than one.

Are You Ready to Take the Next Step with Your Money & Your Marriage?

The question of joint vs. separate checking accounts is important, but it’s only scratching the surface of the money goals and problems you’re dealing with as a couple.

Lucky for you, we’ve teamed up Ann Arceo, an awesome couples financial planner from The Savvy Duo to create an easy-to-follow plan called “How to Get Control of Your Money & Create the Future You Desire Together“

We walk you through 5 key money moves and show you exactly how to make them happen in your marriage.

Plus, you’ll have the help you need to overcome the other money frustrations you’ve probably encountered…

…from trouble getting started (or staying on track) to a reluctant spouse.  And we’re giving you all the cool tools you need to make it as easy as possible!

Click Here to Start Your Money Makeover!

So, I just have to know:

Do you and your spouse use a single joint checking account or do you choose to keep separate accounts?  Why?

Share in the comments!

4 Marriage Money Mistakes & How to Avoid Them

By Dustin | Finances & Careers

Money problems are one of the top reasons that marriages end in divorce, yet unfortunately, most engaged and newly married couples fail to prepare themselves.

Although you’ve likely had a lot of serious talks about life including if you want to have children, where you want to live, what kind of career you want to have, chances are you skimmed through the money talk.

Though you both may be juggling your finances separately, now that you’re joining together as one, being on the same page is critical.

Below, are some of the common mistakes newlyweds make that end up costing them big later.

1. Not Sharing Financial Habits and Debts

Once you’re married, your money and finances are a joint effort.

As such, you must know how your partner deals with their finances, and more importantly, how much financial baggage they’re carrying with them. Waiting to disclose this information can lead to serious arguments about money in the future.

Knowing if your partner is a saver or a spender, whether they pay bills timely or whether they procrastinate, and having a general idea of how much debt they’re carrying around can help you both to make a plan that will secure your financial future.

2. Spending Too Much on Housing

The prospect of buying a new house can be exciting.

You’re ready to start your new lives together and want the perfect place to build from. Be that as it may, it is imperative to consider all expenses before purchasing a house.

Newlyweds fail to analyze the true cost of homeownership and essentially buy more of a home than they can afford. However, buying more home than you can afford is a surefire way to end up in debt or having your home foreclosed on.

Though getting a home is ideal for a married couple, it should be done with careful consideration. Review your options with a mortgage company to find the best loan rates and mortgage programs for first time home buyers. Then analyze your finances to ensure that you can afford the cost of owning a home.

If you’re unable to afford the big family home you’ve been eyeing, consider a condo or starter home and then relocate once you have the money to do so.

3. Not Having a Rainy-Day Fund

You never know what could come up that requires a large amount of cash to fix.

Newlyweds make the mistake of forgetting the plan for a rainy day. An issue with the house, the loss of a job, a need to pay for something for the kids, anything could occur, and unfortunately, they aren’t prepared.

This forces them to have to go deeper into debt by taking out a loan.

While you appreciate the sunshine, there will be rainy days that you need to prepare for. You never know when you’re going to need to repair or buy a new car, get the furnace replaced, or even worse, you may have to deal with you or your spouse losing a job.

Savings should be a staple in your financial plan. Putting aside at least 3-6 months’ worth of income can help to cover the costs of unexpected expenses.

4. Not Having a Budget

When you’re single, living on a budget may be less of a priority. You don’t have any other responsibilities outside of yourself and your own bills.

Many couples keep the same mentality that they’ll handle their own finances and make the mistake of not creating a budget. However, managing money separately can lead to miscommunication and misuse of household funds.

Creating a budget and sticking to it is not as hard as you think. You must be open and honest with one another about your debts, monthly bills, and your income. Then execute a financial plan that will cover all household bills.

Budgeting can help you to make informed decisions for the household and it most certainly keeps you out of debt.

Part of getting married is all about trial and error. It’s about finding your own way to make your union work. Be that as it may, when it comes to money matters, trial and error could be the very thing to tear your marriage apart.

Avoid these mistakes at all costs by openly talking to your spouse and creating a budget that will allow you to live out the life you’ve always dreamed of.

 

7 Reasons Every Smart Couple Needs a Side Income (and How to Get One)

By Dustin | Finances & Careers

How would your family benefit from an extra $250, $500 or even $1,000 every month?

In this post, I want to share why it’s so important that your family develop a side income and show you how to make it happen – complete with real-life examples of the many ways we’ve added to the bottom line in the Riechmann household.

7 Reasons You Need a Side Income

Let’s start by outlining a few of the many benefits of developing a “side hustle” and bringing in an income outside of your 9-to-5 paycheck.

1. More Money 🙂

Duh, right?  Let’s start with the obvious – just like a big raise at work, side income increases your bottom line.

If you’re doing the right thing and budgeting every dollar of your income, you probably know exactly where you’d plug in some extra cash.  Even if you’re not that organized, I bet you could find some awesome things to do with 500 bucks.

You could pay off debt, give more to charity, save for emergencies, go on nice vacations…all the wonderful things that more income allows your family to enjoy.

Good stuff for sure, but this is just the start!

2. Greater Freedom

If you put it in the right context, more money is ultimately about enjoying more freedom.  When you’re not stuck living paycheck-to-paycheck but instead start building more margin in your budget, it gives you options to do more of things you want to do as a family.

In practical terms, killing off debt payments and boosting your income to reclaim your monthly cash flow gives you the freedom to make choices about how to spend your money and your time.

It could also represent the opportunity to leave a job you don’t enjoy to do something you love.

3. Sense of Security

This is where a side income really starts to separate itself from a regular paycheck.  The raw truth is that dependence on a single income source is really dangerous – you’re only an economic downturn or angry boss away from losing it all.

When you develop alternative forms of income, you can not only build a bigger emergency fund and nest egg, but you can enjoy the security of knowing that one change won’t wipe out your inflow of cash.

And as your side pursuits mature, you’ll likely find that you can automate (or hire out) much of the work and create passive income that supports you without direct investments of time – that’s true financial freedom!

4. Opportunity for Something BIG

What starts off as a modest attempt to make an extra $200 could grow into something much, much larger.

Many of the world’s most successful companies started off as side ventures or small solo pursuits…have you ever watched Shark Tank?

The fact is that you never know where the market may take you – a simple idea can strike it big and grow into a massive success.  That’s exciting!

5. Help Others

One of the awesome benefits of doing good work is that you get to help others in the process.  The best way to make money is to provide genuine value by helping people.

While you may feel this in your day job, there’s a good chance that your side hustle will connect you more closely with the value cycle and let you experience the real joy of helping others.

6. Lifelong Learning

One of the surprising benefits I’ve found in developing side businesses is that it’s incredibly intellectually stimulating.  It’s much too easy to get bogged down in the day-to-day demands of a regular job and never stretch your thinking.

When you do work on the side, you’ll gain entirely new skills, feel excited to learn something new, and then get to implement it right away to grow your income.

7. Fund Your Dreams

When you think about your dream marriage, there’s a good chance that money will play a role in the lifestyle you desire.  I’m not necessarily talking about sipping drinks by the beach, but enjoying the freedom to live life on your terms.

In our case, it was our side income that was instrumental in allowing Bethany to stay home with our kids several years ago.  Only through side gigs were we able to pay off $54,500 in debt and position our family for the future we desired.

BONUS: Family Bonding

Are you thinking that developing a side income is going to steal too much quality time away from your family?  I totally get that, and it’s a legitimate concern.

It’s all about how you set your business up both in terms of how many hours it requires of you and how much of that time is solo.

When you see the list of former and current businesses we’ve done below – you’re going to think I’m insane and that I must have an extra 8 hours in the day…but the reality is that each side gig is set up strategically to minimize the time required (and we’ve dropped most dollars-for-hours tasks over the years).

One surprising benefit that we’ve found with our side pursuits is that we can actually enjoy some very high-quality time together.  As I note below, my son is my “partner” on one business, and Bethany is absolutely involved in Engaged Marriage.

You should view your side business as a real opportunity to connect around an interesting project that benefits the whole family!

How to Make It Happen (and What We Do)

If generating a side income was easy, you’d already be doing it, right?  Maybe.

It can certainly be intimidating but it’s probably not nearly as hard as you think.  Here are the three main suggestions I have for you as you consider how to generate side income:

1. Start With What You Know
2. Go Low-Cost & Low-Time
3. Get Your Spouse & Family Involved

We’ve built different streams of side income throughout our 17 years of marriage.  When we started out, we traded more time directly for dollars, but we’ve learned along the way and also taken advantage of the power of the Internet.

Here are several examples of side income streams that we’ve enjoyed in our household along with a short description of each.

• Golf Club reselling

This was one of the first side businesses I did, and it was quite profitable with more than $1,000 a month in income.  The model works for lots of different items, but I got into golf clubs when I was trying to find the right set for myself (this is often how I find business opportunities).

In a nutshell, I bought clubs locally (through Craigslist mostly), cleaned them up, and sold them nationally through Ebay.  It’s a classic case of buying low in a local market and selling higher to a broader audience who will pay true market value.

I only quit doing this because it was too time consuming for me to travel around the region buying the clubs, and we discovered more passive income streams.

• Tutoring

Both Bethany and I have tutored kids in various subjects, and it’s a nice way to make extra money.  I still tutor a neighborhood high school student in math occasionally as a favor – I enjoy it and we use the money to pay our kids for household chores.

• Teaching (online and offline)

There are SO many opportunities to teach what you know to others.  One the best ways to do this is to create a simple course on a platform like Udemy where you can reach the world.  You can create the course once and sell it many, many times.  I have one course on Udemy currently.

I’ve also taught engineering courses at a local University, which I found quite fulfilling.  This is more dollars-for-hours in scale, but you may find it’s a great fit for you to teach locally or for a college online.

• Writing

If you enjoy writing, there are pretty much limitless opportunities to get paid to write.  One of the best places to find work is through blogs you enjoy – we employ four awesome writers here at Engaged Marriage.

I’ve written for other blogs for pay in the past, and I’ve also written articles for magazines.  They pay better, but of course this requires more work and specialized skills.

If you want to take it to another level and develop more passive income, you can absolutely self-publish a book!  The Kindle platform in particular makes it easy, and you can also have Amazon convert your ebook to paperback.  I’ve written three books personally, and they all generate a nice passive income through Amazon (and other platforms).

• Engaged Marriage

This very site is a robust business with income from books, workshops, advertisements, affiliate relationships and coaching.  It is FAR from passive with nearly 400 posts written mostly by me and a continuous effort is required, but it’s a true labor of love getting to help others live a married life they love.

• Coaching & Consulting

You can get paid really well for sharing your expertise and guidance with others.  I don’t even advertise these services, but I’m able to generate a very nice side income through coaching and consulting.

You can coach/consult on just about any topic that you have specialized knowledge in.

In my case, I help married couples achieve their dream marriage through strategic planning (set big goals and follow a step-by-step plan to achieve them), and I consult with folks on getting control of their schedule and being more productive.

I also do consulting to help others get started or ramp up their online businesses.  It’s so fun to apply what I’ve learned in six years of online business to help others generate real income to help their families.

Like I said, I’ve never even advertised these services (people contact me), so there’s clearly a real demand out there for help.  If you’d like to chat about working with me in either of my specialty areas, shoot me a message. 😉

• Shin Splints Treatment Kit

This is my latest venture, and I love it because it’s really specific, pretty passive and I get to teach my 10-year-old son about business.  When I got into running about 18 months ago, I suffered BAD from shin splints.

Long story short, I found a quick treatment regime that really helped me and some of my friends (I actually just ran my first marathon two weeks ago).

In the process, I found an opportunity (you develop this mindset once you start a side business) – all the materials I needed to do the treatments were only available from random sources and at pretty high prices.

I simply created a short guide on how to do the treatments, then found wholesale sources for the materials needed (foam roller, ice packs, resistance band).

I shot a 5-minute shin splints instructional video to put on YouTube and put the Shin Splints Treatment Kit up on Amazon.  With NO marketing, we make several sales every week with profits per kit of $15-$22 depending on shipping costs.

My son Braden packs the boxes for me and helps me with shipping.  I pay him $1 from every sale, and he loves it.

This is an awesome way to teach about the entrepreneurship and have fun together while helping others!!

OK that’s quite a list – so we clearly LOVE side businesses!

Keep in mind that we’ve had small children in our home that last 12 years, and I still work a demanding full-time engineering job (that I love).

You can totally do this. You’ll notice that a lot of our endeavors have been centered online, which we love for the flexibility it provides, but I know many other couples who thrive with “real world” businesses helping those in their community.

It all starts with one simple idea and a smart action plan…and I know just the guy to lead you on that front!

Want The Exact Steps We Use to Make Extra Money On the Side?

I can only share so much in a blog post before it becomes ridiculously long, but if you’re interested in learning more about creating a side income for your own family – we’ve got you covered.

We created an amazing program with my friend and New York Times best-selling author Dan Miller called “How to Make an Extra $500 per Month on the Side to Bless Your Family” and you can get instant access to it right now.

Click here to get instant access to the side income workshop at amazing value!